Interestingly, the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. It seems the main reason why non-homeowners do not own their own homes is because they believe that they cannot afford them. Guess what. The probably can.
There are two major misconceptions when buying a home.
1. Down Payment
Most consumers overestimate the down payment funds needed to qualify for a home loan.
According to a recent survey, 53% of Americans who plan to buy or have already bought a home admit to their concerns about their ability to afford a home in the current market. In addition, 46% are currently unfamiliar with alternative down payment options, and 46% of millennials do not feel confident that they could currently afford a 20% down payment.
The truth is, there are many loans written with down payments of 3% or less!
Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.
2. FICO®Scores
Most people believe they need excellent credit to buy a home, with many thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.
The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724. But, if you still need a credit boost, here are tips on how to do it.
If you’re considering buying a home but unsure if you’re able to, give me a call. I’m happy to put you in touch with a reputable lender who can help you understand your true options today. 301-320-8349 or 703-963-0142. Email works too: robyn@robynporter.com
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Categories: Buying a home, Down payments, Financing
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Reblogged this on Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, RHS, Fannie Mae Home Mortgage Loans in Kentucky for 2018 and commented:
Most people believe they need excellent credit to buy a home, with many thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.
The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724.